A new solution for FCA hire fees21/12/2017
A group of lessors, including One pm, Kennet Leasing, Tower Leasing and Henry Howard, is calling on others in the industry to respond to an FCA consultation on possible changes to the ways the regulator charges its costs to regulated firms.
At present the FCA fees for regulated credit agreements such as hire-purchase are based on the interest charged, but fees for regulated hire agreements are based on the total rental payments. As a result, the FCA ‘levy’ on a £20,000 hire agreement might be £20 per year compared to £5 per year for a similar credit arrangement.
In its annual fees consultation, closing on 15 January 2018, the FCA is asking for views on whether the current fee calculations are fair, and what improvements could be made. One option is to allow firms to calculate their ‘regulated income’ - the basis of the FCA fees - based on the interest element of the agreement for both hire and credit arrangements.
“Many in the industry believe the current FCA fees rules are unfair for businesses and individuals that want to hire rather than buy vehicles or equipment. This is our opportunity to secure an improvement that will help avoid the leasing industry paying more than its fair share of the regulator’s costs, but it will only happen if firms respond to the consultation in early January,” said Jason Davies, General Manager at One pm Finance.
To help other firms to respond to the consultation efficiently, a briefing note is available on request from Julian Rose (firstname.lastname@example.org).